Seasonally adjusted real sales:

August: -0.2% m/m, +2.2% y/y

MNI survey median: +0.5% m/m
MNI survey range: flat to +1.5% m/m

July: -0.4% m/m, +1.2% y/y (revised from -0.1%/+1.1%)
—

FRANKFURT (MNI) – Turnover in the German retail sector continued to
contract in August, leaving overall levels at their lowest in four
months, the Federal Statistical Office reported on Friday.

Analyst had broadly expected a rebound in sales last month, with
the most pessimistic forecasts pointing only to stagnation between July
and August.

On the month in August, sales fell 0.2%, adding to July’s revised
decline. However, base effects left sales up 2.2% on the year, nearly
doubling July’s annual result. Nevertheless, the average of the two
months’ sales was still 0.1% lower than the 2Q average.

Among the larger components of the index, for which only annual
figures are released, food, drink and tobacco sales were down 2.0%,
while non-food sales suffered a more modest 0.4% slide.

While Markit Economics’ retail purchasing managers index (PMI) saw
some improvement in September, respondents reported a marginal decline
in sales for the month, due in part to poor weather, resulting in a PMI
of 49.5. However, optimism for October, measured in the same report, hit
its highest level since February 2008, with job growth in the retail
sector seen at a three-year high.

German retailers polled by the European Commission were more
upbeat, citing better current conditions, higher order plans and the
best near-term business prospects in nearly 20 years.

In the Ifo institute’s latest survey, retailers said the current
business situation was “even better than ever before since the
unification boom” and remained exceptionally optimistic about prospects
at the six-month horizon.

Retailers can also take heart from an expected rise in the GfK’s
consumer sentiment index to a three-year high in October.

“If the environment continues to develop in a similarly positive
manner over the coming months and the consumer climate enjoys further
stimulation, private consumption will perform better than originally
forecast by GfK, with growth of up to 0.5% rather than stagnation a
realistic possibility,” the market research group said.

“The decisive factor in the strong sentiment among consumers is the
extremely positive development of the employment market,” GfK explained.

On Thursday, the Federal Labour Office reported that the jobless
rate fell to 7.5% in September, reflecting 40,000 fewer people actively
searching for work, while the number of payroll jobs grew by 46,000 in
August, adding to July’s +18,000 figure.

— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —

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